72552 v1 World Trade Indicators 2009/10 Cameroon Trade Brief Trade Policy cases, removed import taxes on equipment required for oil exploration. Cameroon’s trade policy is primarily based on the Common External Tariff (CET) of the Economic and Monetary Community of Central Africa (CEMAC), External Environment which the country adopted in 1993. The CEMAC As judged by the country’s Market Access TTRI2 CET rates are generally higher than those of other (including preferences) of 2.0 percent, the trade countries in the Sub-Saharan Africa (SSA) region as barriers it faces are similar to that of an average lower- reflected in Cameroon’s MFN Tariff Trade middle-income country (2.3 percent) but it faces a Restrictiveness Index (TTRI)1 of 14.7 percent, which relatively more favorable trading environment than an is higher than both the SSA and lower-middle-income average SSA country (3.9 percent). The weighted country averages (11.6 percent and 8.6 percent, overall rest of the world tariff (including preferences) respectively). One of the few African countries faced by the country is 1.7 percent, driven in large part approaching food security, Cameroon provides higher by the low tariff of 0.9 percent on its non-agricultural tariff protection to its agricultural sector at 17.1 exports, primarily oil. Its agricultural exports face a percent versus 14.2 percent for its non-agricultural much higher tariff of 5.7 percent. The country’s sector. Based on the TTRI, it ranks 117th out of 125 currency, the CFA franc, which is pegged to the euro, countries (where 1st is least restrictive). The country’s appreciated by 3.8 percent in 2008 in real, trade- average MFN applied tariff has remained relatively weighted terms, reducing the competitiveness of the stable over time and is currently 17.8 percent. In line country’s exports. with the CEMAC’s policy, the maximum MFN tariff imposed on imports (excluding alcohol and tobacco) is As negotiations between the Central Africa group, to 30 percent. The country’s trade policy space, as which Cameroon belongs, and the EU towards a full measured by the wedge between bound and applied Economic Partnership Agreement (EPA) could not be tariffs (the overhang), is 57.9 percent. Regarding its completed prior to the December 2007 deadline, commitment to liberalizing services trade, Cameroon Cameroon signed a bilateral “interim� agreement with ranks 135th (out of 148) on the GATS Commitments the EU in January 2009. The “interim� EPA gives Index. Cameroon duty-free and quota-free access to the EU market in exchange for an asymmetric and gradual To address the food and fuel crises in 2008, the opening of its own economy to EU imports. The government reduced import taxes on commodities country continues to negotiate a comprehensive such as rice and wheat flour and suspended customs regional EPA with the EU as part of the Central duties on fuel. The government also banned the re- Africa group. exportation of subsidized commodities. To boost economic growth amid the financial crisis, the country, which is an oil exporter, has reduced and, in some Behind the Border Constraints Cameroon remained in the bottom 10 percent of international business environments in 2009, being Unless otherwise indicated, all data are as of August 2009 ranked 171st out of 183 countries in the Ease of Doing and are drawn from the World Trade Indicators 2009/10 Business index. It fared better on the Logistics Database. The database, Country Trade Briefs and Performance Index (LPI), which reflects the extent of Trade-at-a-Glance Tables, are available at trade facilitation, scoring 2.49, on a scale of 1 to 5, http://www.worldbank.org/wti. compared to the SSA and lower-middle-income averages of 2.35 percent and 2.47 percent, respectively. If using information from this brief, please provide the It ranked 84th (out of 150) in the world and 9th (out of following source citation: World Bank. 2010. “Cameroon 39) in the SSA region (with South Africa leading the Trade Brief.� World Trade Indicators 2009/10: Country Trade regional group). Among the LPI subcategories, it Briefs. Washington, DC: World Bank. Available at performed best in ensuring the timeliness of http://www.worldbank.org/wti. World Trade Indicators 2009/10 Cameroon Trade Brief shipments in reaching their destinations while its disbursement under the exogenous shock facility weakest performance was in the quality of transport (ESF) that will help support the balance of payments. and IT infrastructure for logistics. Notes Trade Outcomes 1. TTRI calculates the equivalent uniform tariff that After falling 3 percent in 2007, real trade (in constant would keep domestic welfare constant. It is weighted by 2000 U.S. dollars) increased by 34.1 percent in 2008, import shares and import demand elasticity. although it is projected to decline again by 0.2 percent 2. MA TTRI calculates the equivalent uniform tariff of in 2009. Exports experienced a turnaround, going trading partners that would keep their level of imports from a contraction of 12.1 percent in 2007 to growth constant. It is weighted by import values and import of 24.6 percent in 2008. Import growth also demand elasticities of trading partners. accelerated sharply from 6.2 percent in 2007 to 42.1 percent in 2008. Both exports and imports are, however, expected to have dismal performance in References 2009, with exports projected to fall by 2 percent and African Economic Outlook. 2009. Cameroon. African imports projected to grow by only 1.2 percent in 2009. Economic Outlook. May 27, 2009. OECD, Paris. In nominal terms, World Bank estimates suggest that . rate of 14.3 percent in 2007. Export growth, in Europa. 2009. “EU and Cameroon Sign Trade particular, experienced a sharp acceleration from 9.5 Agreement.� Europa. January 15, 2009. . 2007. Boosted in part by increased production of Food and Agriculture Organization of the United cocoa, the country’s main agricultural export, as Nations (FAO). 2008. “Policy Measures Taken by planters responded to higher prices, goods exports Governments to Reduce the Impact of Soaring registered an estimated growth rate of 26.1 percent in Prices: Africa—Cameroon.� FAO. December 15, 2008. 2008, up from 12.9 percent in 2007. Services exports also recovered in 2008, growing at an estimated 14.4 International Monetary Fund (IMF). 2009. International percent after a 9.7 percent decline in 2007. The robust Financial Statistics. IMF, Washington, DC. July performance of exports may, however, not be 2009. < http://www.imfstatistics.org/>. sustained in 2009, as goods exports are projected to United Nations (UN). 2009. The Global Financial Crisis: drop significantly by 30.1 percent, owing in part to an Impact, Responses and Way Forward. UN, New York, expected fall in oil prices, while services exports are NY. May 13, 2009. . FDI inflows in 2007 were 2.1 percent of GDP, with World Trade Organization (WTO). 2007. “Trade Policy most of it going to the oil and mining industries. To Review—Cameroon.� WTO, Geneva. December 5, mitigate the deteriorating external outlook, the 2007. .